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Friday, June 21, 2013

Daily update 6/21

The gap up this morning was right in the area of the 6/6 low.  SPX then sold down to 1577 one point above the key 1576 area and bounced.  When price got up to that 6/6 low the selling started up again.  For today the 1598 level was clear resistance.  That was probably longs that did not have stops in place getting out.  The question is how many are there and are there enough bargain hunters to overcome them.  Here is the SPX daily chart.

We still have a blue bar so SPX is still below the lower Bollinger band.  Until it gets back inside it can mean we are in an accelerated move down.  An up day today just relieved a bit of oversold pressure and delayed my good oversold buy signal should we continue down next week.  It looked like the bulls were going to make a low today, but they fumbled the ball in the last hour.  A break of 1576 could start another round of selling.  I am not exactly sure where the margin calls will start to come in.  If we get to that point it is going to drop like a rock if the bids disappear.

The key on the upside is that 6/6 low in the 1597-1600 area.  The bulls have to get SPX above there to get going.  The longer we stay below that level the less likely we will get above it.  We had a high volume sell off and VIX over 20.  If that does not get the bulls buying we are going lower.  I mentioned the other day the action off the 6/6 low looked like a bear flag.  Today acted like that might be the case.  After dropping 40 points yesterday a 4 point bounce is nothing.  The bears are still in control for the moment.  We will see who shows up on Monday.

Chart practice has been updated with APOL the stock for today.

When I updated the sector status page there were no green sectors on the weekly charts.  Most are now red.  If we don't make a low here soon the market is going to get very bearish.

Have a great weekend all,

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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.